Financial news

Leading Australia banks reach $126M class action settlement over issuance of ‘deceptive’ insurance policies – JURIST

Australian law firm, Slater and Gordon, Monday reached a settlement of 126 million Australian dollars ($84.4 million) with Australia’s largest banks and insurers. The settlement is the result of several class action lawsuits filed by the firm on behalf of bank customers who were improperly sold insurance policies when they took out loans or obtained credit cards from the banks.In 2020, Slater and Gordon filed separate class action lawsuits on behalf of almost one million customers against Commonwealth Bank of Australia (CBA), Westpac Banking Corp, and Australia and New Zealand Banking Group (ANZ). The class actions alleged that the banks misled customers and acted deceptively and unconscionably in the sale of optional insurance policies. The class actions also alleged the banks provided a number of customers with “inappropriate personal advice” about the policies.Banks allegedly failed to inform customers that the insurance policies were optional and that, once in place, customers would be charged for coverage. Some bank customers even alleged they never provided their consent to the purchase of the insurance policies.For example, Kristy Fordham, the lead plaintiff in the CBA case, was told that she would not be guaranteed loan approval unless she took out a loan protection policy. Fordham was diagnosed with serious health conditions, meaning she was never going to be eligible to claim under the policy. In a statement, Fordham noted, “We were all so vulnerable or else we wouldn’t have needed loans from them in the first place, yet they took advantage of that.” Senior Associate at Slater and Gordon, Alex Blennerhassett, commented, “Taking on the big banks was never going to be easy but [Slater and Gordon] are pleased that we have been able to resolve these group proceedings and that eligible customers will benefit.”The banks and insurers agreed to the settlement amount without admitting any wrongdoing. The settlement is still subject to court approval before it is finalized.